Burnley counts cost of leveraged takeover in relegation battle
Burnley (UK) (AFP) – Rooted at the foot of the Premier League table, Burnley are struggling to survive on and off the pitch as they prepare for Manchester United’s visit to Turf Moor on Tuesday.
An American-backed takeover just over a year ago has so far failed to live up to hopes that it would give manager Sean Dyche a more competitive budget to work with.
Dyche is the oldest manager in the English top flight and has kept Burnley in the richest league in the world for six consecutive seasons.
However, beating the drop this season may overtake even the 50-year-old as the lack of resources catches up with the Clarets.
Fans fear Burnley are following United’s lead for the wrong reasons.
A controversial 2005 leveraged takeover by the Glazer family left the Red Devils in debt amounting to hundreds of millions of pounds which they have since had to repay.
The £170m ($230m) takeover of Burnley by US investment group ALK Capital has also weighed down the previously debt-free club with huge loan repayments.
US tech tycoon Michael Dell reportedly provided £60m financing for the takeover at an interest rate of around 9%.
However, a Daily Mail report claimed last month that relegation could trigger the early repayment of that loan.
Despite Burnley’s perilous position in the table, the club still made a profit in the January transfer window.
Relegation rivals Newcastle poached Chris Wood for £25million and he was replaced by Dutch striker Wout Weghorst for half the price, with no further income.
“January is a notoriously difficult window and as a club we have done that, and we will continue to do that in the future, whatever we can to get the right players through,” chairman Alan Pace said before Saturday’s 0-0 draw at home to Watford.
That point left Burnley three points from safety with just one win in 19 league games this season.
But they have several games in hand coming up on the three sides above them in the table.
Dyche has refused to publicly criticize his bosses despite rumors that Pace is involved in the process of locating targets in the transfer market.
“Alan has tried to be open-minded and to help with those details as much as possible. The overriding fact however remains the money,” Dyche said this week.
United’s visit is a timely reminder that money doesn’t buy everything.
Club debt hasn’t stopped the Glazers from providing a string of managers with the cash needed to compete at the top of the table since Alex Ferguson retired in 2013.
However, under caretaker boss Ralf Rangnick, their ambition for the final stages of the season is simply to break into the Premier League’s top four to secure a return to the lucrative Champions League next season.
Even a club the size of United cannot afford to miss out on Europe’s premier club competition.
Burnley’s downfall would be even greater if they couldn’t escape the trapdoor of a Championship drop.